How long can the S&P 500 keep 2,000?
How long can the S&P keep 2,000?

The Federal Reserve and Congressional politics threaten to rain on the market party.

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Rising commodity costs are squeezing margins, and the menu's price limit leaves the company no place to go.

By InvestorPlace Dec 23, 2010 9:57AM
By Jeff Reeves, Editor, InvestorPlace.com
   

An article from the Atlanta Journal-Constitution this week chronicled the rock-and-a-hard-place challenge of restaurant companies right now. On one hand, weak consumer spending and high unemployment have prompted most casual-dining and fast-food chains to slash prices to keep customers at the table. On the other, inflating agricultural commodity prices mean produce, grains and beef are getting more expensive by the day.


That means the big question for 2011 is not whether restaurants will pass those prices on to consumers but when and how much. And the lowest-priced items on the menu are natural targets, since margins are already razor thin in most cases.

 

The Chinese search engine might have seen market share growth peak, but the ad revenue keeps flowing.

By Jim J. Jubak Dec 22, 2010 5:41PM
Jim JubakShares of Baidu (BIDU), China’s leading Internet search provider, have been drifting lower since a Nov. 11 high of $114.10 -- until yesterday. The shares moved up to $101.25 at market close, a 2.5% gain on the day. Shares closed with a slight loss Wednesday at $100.50.

The most recent part of the price decline traces back to comments by Haoyu Shen, Baidu’s vice president of business operations, that growth will slow next year. "We had a major re-acceleration this year, that’s due to a few reasons," he told Reuters on Dec. 15. "For these reasons, it most likely won’t repeat itself next year."

I think that’s true if you're looking just at Baidu’s market share. The company saw its share of the Chinese search market grow to 73% in the third quarter of 2010 from 71% in the previous quarter. That growth came largely at the expense of Google (GOOG), which saw market share decline to 25% from 27% for the quarter.
 

The metal's price has skyrocketed 28% this year, and one trader owns a huge chunk of it.

By Kim Peterson Dec 22, 2010 3:00PM
Cash © Jonathan Kitchen/Getty ImagesHoarding commodities is a risky business. Just ask "Choc Finger." But for one trading company, stockpiling copper appears to be paying off.

One trader owns 80% to 90% of the copper sitting in London Metal Exchange warehouses, The Wall Street Journal reports. That's about half of all the exchange-registered copper in the world, and it's worth about $3 billion.

Not a bad position to be in, considering that copper prices have reached record highs this week. On Tuesday, copper hit $4.2705 a pound -- an increase of 28% this year. 

Bloomberg says Amazon could sell more than 8 million e-readers this year.

By Kim Peterson Dec 22, 2010 2:44PM
Credit: (© Amazon.com)
Caption: Amazon KindleAmazon (AMZN) has stubbornly refused to give real sales information for its Kindle, preferring only to describe the e-reader as its best-selling product.

Investors want a better sense of how the Kindle affects Amazon's bottom line, and Bloomberg finally gives a glimpse. Amazon will likely sell more than 8 million Kindles this year, Bloomberg reports, citing two people who know about the company's sales projections.

That 8 million, by the way, far exceeds the 5 million that most analysts have predicted for Kindle's 2010 sales. One of Bloomberg's sources says that last year Amazon sold 2.4 million Kindles. 

One observer gives his reasons for not wanting one yet.

By Kim Peterson Dec 22, 2010 2:04PM
Credit: (© Justin Sullivan/Getty Images)
Caption: Apple iPadIs the iPad truly the hottest gift this year? That's what Brett Arends of The Wall Street Journal says. I don't know anyone asking for an iPad this year.

One analyst predicts Apple (AAPL) will sell 6 million this quarter -- about half of them in the U.S. "It's driving the company toward what will probably be yet another blowout Christmas period," Arends writes.

But he says he doesn't want one because it will be cheaper next year. A new one is expected in April, and it's going to be better. 

The Chevy Volt is where the IBM PC was 1981: an overpriced, bulky first step toward a new world.

By TheStreet Staff Dec 22, 2010 12:35PM

Car sales © Image100/JupiterimagesBy Ted Reed, TheStreet

 

Auto sales seem likely to rise in 2011, a positive sign for both the economy and the automakers, which should all benefit as a rising tide lifts all boats.

 

Estimates for 2011 light-vehicle sales include 13 million by Morningstar analyst David Whiston and 15 million by Bank of America Merrill Lynch analyst John Murphy. Ford sales analyst George Pipas says 2011 sales "will be above 12 million and perhaps closer to 13 million," according to The Detroit News, an increase from current year sales of about 11.5 to 11.6 million. Incidentally, Whiston puts 2012 sales at 18.5 million.

 

Whatever the exact numbers, the trend is obvious, given 2009 sales of 10.4 million, the lowest total since 1970. Automakers may not be at the center of the U.S. economy, as they were a few decades ago, but it is clear that few economic indicators are more important than consumer decisions to spend tens of thousands of dollars on a new vehicle.

 

The markets want to know how the economy is growing, and experts are confident of an upward revision.

By Jim J. Jubak Dec 21, 2010 9:57PM
Jim JubakNo holiday from economic data this week.

Wednesday morning brings what's called the final revision of third-quarter U.S. GDP growth estimates. (We’ll get the final, final figure in 2011.)

The previous estimate came in at 2.5% growth, itself an increase from the first estimate. Economists project that Wednesday’s revision will bring the growth rate up to 2.8% for the quarter that ended in September.
 

After a long period of underperformance, REITs are on the move again.

By Anthony Mirhaydari Dec 21, 2010 6:29PM

Stocks have had an impressive few months. The major averages are trading at new multi-year highs. And the S&P 500 is up nearly 21% from its late-August low. But not all stocks have participated equally. 


Real estate stocks in particular have fared poorly. The iShares Real Estate (IYR) -- which tracks the performance of a collection of high yield REITs -- has lost nearly 10% on a relative basis compared to the S&P 500 over this period.


That's changing now. With bonds selling off, cautious investors are gingerly stepping back into stocks. As a result, real estate stocks have outperformed the broad market over the last three days -- and the sector looks ready for more. Here's why, along with a fast moving recent IPO that looks ready to soar. 

 

These three bond funds employ strategies designed to excel in difficult market conditions.

By TheStreet Staff Dec 21, 2010 4:13PM

By Stan Luxenberg, TheStreet

 

During the past month, the average intermediate-term bond fund lost 1.1%, according to Morningstar. Now many economists worry that bond markets could face more hard times in 2011. Which bond funds will do best in the coming year?

 

To find promising choices, consider funds that proved resilient during the hostile bond markets of recent weeks. Among the top performers of the past month, my favorites include Pimco Floating Income (PFIAX), Templeton Global Bond (TPINX) and DoubleLine Total Return Bond (DBLTX). These resilient funds employ strategies that are designed to excel in difficult market conditions.

 

Bond funds have suffered lately as interest rates have risen. Yields on 10-year Treasuries have climbed to 3.33% from 2.6% in early November. Many forecasters predict that rates will continue rising in the next year. When rates climb, bond prices tend to drop as investors flee existing issues in search of new bonds with higher yields.

 

Banks are paying bigger salaries and cutting back on bonuses. And that can hit employees hard.

By Kim Peterson Dec 21, 2010 3:31PM
Frustrated © Corbis On Wall Street this year, no one wants to be a Zero.

Those are the back-office employees and mid-level bankers that will get no annual bonus this year, The New York Times reports. At one time, this would have been unimaginable. But after the financial crisis, many banks cut bonuses and compensated by raising salaries.

So the Zeroes get more in their paychecks, but at the end of the year they see no bonus. "Even though employees will receive roughly the same amount of money, the psychological blow of not getting a bonus is substantial, especially in a Wall Street culture that has long equated success and prestige with bonus size," the Times reports. 

The company is finding that a television service with multiple hardware partners is not easy to develop.

By Kim Peterson Dec 21, 2010 2:38PM
Blank TV © Digital Vision Ltd./SuperStockIt's really difficult to roll out a television service. Ask Apple (AAPL), which has worked on Apple TV for years. Or TiVo (TIVO), which has rolled with about every punch out there.

Google (GOOG) is now seeing just how tough the TV landscape is. Its much-anticipated Google TV was supposed to get a glitzy launch next month at the Consumer Electronics Show in Las Vegas.

Now Google is delaying the launch to improve the software, which people aren't crazy about, The New York Times reports. The company is telling TV makers to hold off on any introductions. 

These funds should capture the strength of the power industry in 2011.

By TheStreet Staff Dec 21, 2010 12:34PM

Energy © CorbisBy Don Dion, TheStreet

 

The global energy industry will likely be an interesting region of the market to watch in the new year. As emerging markets turn to various fuel sources to feed their insatiable thirsts for energy, developed corners of the globe seek resources such as oil, coal and natural gas to prolong their ongoing recovery pictures.

 

ETF investors can use a number of strategies when it comes to capturing the strength of the energy industry in 2011. Products such as iShares Dow Jones U.S. Oil Equipment & Services Index Fund (IEZ) or Market Vectors Coal ETF (KOL) provide ample exposure to a diverse collection of energy-related companies worldwide.

 

US customers will soon be able to pay for their coffee with their smart phones.

By TheStreet Staff Dec 21, 2010 12:19PM

MainStreetCredit: (© Michael Conroy/AP)
Caption: Customer in a Starbucks storeBy Brian O'Connell, MainStreet

 

Coffee giant Starbucks (SBUX) will roll out a new mobile payment system nationwide early next year after successful trial runs in New York, California and Seattle.

 

In a note to customers dated Nov. 1, product manager Chuck Davidson said the Starbucks mobile app is up and running in 300 locations in New York and at select stores in Seattle and Northern California.

 

Morningstar says NRG Energy and Sprint, among others, may get a big boost if business turns in their favor.

By TheStreet Staff Dec 21, 2010 12:16PM

Find hot stocks © Digital Vision / Getty ImagesBy Jake Lynch, TheStreet

 

Investors have overlooked the inherent value of the following five companies, which receive five-star ratings from Morningstar. Still, they have many challenges. Morningstar predicts the stocks could more than double as business fundamentals improve. Below they are ordered by potential return, from great to best.

 

5. GenOn Energy (GEN) is an independent power producer with exposure to volatile commodity markets. It was formed through the all-stock merger of Mirant and RRI. The combined entity boasts a stronger balance sheet and competitive position.

 

Traders who don't understand the necessity of bargains in retail have missed out on much of the sector's surge. But one discount retail stock is still 'a screaming buy.'

By Jim Cramer Dec 21, 2010 9:38AM

more stock picks and investing advice from jim cramer at thestreetAs we go into the final days before Christmas, let me tell you the most overrated word in the stock investing lexicon: discounting. This refers to the idea that the retailers are going to miss the numbers because of all the discounting going on.

 

One of the most amazing facts out there is that the retailers know they have to offer bargains. They know the consumer is smart. They know people compare prices on the Web. They know that when consumers go to stores, they have prices in mind, regardless of the possible service they will get -- and they care more about price than ever.

 

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[BRIEFING.COM] The S&P 500 trades lower by 0.1% with one hour remaining in today's forgettable session.

Today's economic data was limited to the weekly MBA Mortgage Index (+2.8%), but tomorrow will be a bit more busy, featuring the second estimate of Q2 GDP (Briefing.com consensus 2.0%), the Pending Home Sales report for July (consensus 0.5%), and weekly initial claims (consensus 302K).

Elsewhere, Treasuries are on their highs with the 10-yr yield down four basis points at ... More


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